Sarasota Real Estate Market News

Concerns remain over mortgage interest deduction

WASHINGTON – Feb. 1, 2013 – Tax reform remains a possibility this year, and it could include more talks about nixing or lowering the homeowner’s tax deduction on mortgage interest.

Should that possibility be raised, a lawmaker, analysts and Capitol Hill staff speaking at a forum yesterday said that it would help legislators to hear from Realtors to reduce the chance that their decisions could hurt markets.

“We really value your judgment because of your sense of the economy, and also because you know what your neighbors think,” said Rep. Chris Van Hollen (D-Md.), ranking minority member on the House Budget Committee.

Van Hollen made his remarks before a group of politically active Realtors in town for a day of orientation on federal issues of importance to real estate.

Staff professionals who work with members of Congress told Realtors that lawmakers have a lot on their plate, and it’s difficult to predict the likelihood that they’ll tackle tax reform. But a staff person on the House’s tax-writing Ways and Means Committee says the committee chair, Rep. Dave Camp (R-Mich.), would like to see comprehensive reform passed out of his committee this year.

Would the mortgage interest deduction be part of the mix?

It can’t be ruled out, the staff aides and other speakers said, so Realtors have to remain engaged and sift through proposals that would be unacceptable.

“Some proposals will be worse than others,” Van Hollen said. He added that his sense is many members of Congress believe supporting homeownership is a “good policy choice” and that he will “certainly oppose any effort” to change or dismantle the mortgage interest deduction.

Van Hollen and Hill staffers said Congress faces three more “fiscal cliff”-like deadlines that will keep the economy in a state of uncertainty: the deadline for the automatic, across-the-board cuts to federal programs, known as the sequester, on March 1; the deadline for raising the debt ceiling on May 19; and the deadline for extending a continuing resolution, which is a temporary budget measure for keeping the federal government operating in the absence of a congressionally passed appropriations bills, which expires March 28.

A panel of analysts agreed that for most of the public and lawmakers, the issue of whether the federal government should support homeownership is largely decided, and it’s in favor of maintaining a path for a broad swath of households.

“I think that’s where the country is,” said Jaret Seiberg, managing director and financial services policy analyst for Guggenheim Securities.

“There isn’t a snowball’s chance in hell that any of these programs are going away,” said George Mason University professor Anthony Sanders, referring to FHA, Fannie Mae and Freddie Mac, among other ways the federal government is involved in homeownership.

The more immediate issue isn’t whether the programs will go away – it’s how they might be modified. On that question, analysts and staffers echoed Van Hollen’s argument: Realtors must stay engaged in the discussions. The worst thing that can happen is for lawmakers to make changes without understanding the impact of what they decide.

“Come in to see us and tell us how these different ideas impact the market,” said one of the staff aides on the House tax-writing committee.

Source: Robert Freedman, Realtor® Magazine

February 9, 2013 - Posted by | News related to Financing

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